Rationalization Charges

9 Months Ended

Sep. 30, 2012

Rationalization Charges

Note 3.    Rationalization Charges

As part of our plans to rationalize certain facilities, we have established reserves for employee severance and benefits and plant exit costs.  Activity in our rationalization reserves since December 31, 2011 is summarized as follows:

	Employee			Plant			Non-Cash
	Severance			Exit			Asset
	and Benefits			Costs			Write-Down			Total
	(Dollars in thousands)
Balance at December 31, 2011	$	4,385		$	211		$	-		$	4,596
Activity for the nine months ended September 30, 2012
Prior years’ rationalization plan reserves established		1,100			(1,027	)		39			112
Prior years’ rationalization plan reserves utilized		(3,731	)		1,027			(39	)		(2,743	)
2012 rationalization plan reserves established		3,524			1,001			1,172			5,697
2012 rationalization plan reserves utilized		(946	)		(1,001	)		(1,172	)		(3,119	)
Total activity		(53	)		-			-			(53	)
Balance at September 30, 2012	$	4,332		$	211		$	-		$	4,543

Rationalization reserves as of September 30, 2012 and December 31, 2011 are included in the Condensed Consolidated Balance Sheets as accrued liabilities.

2012 Rationalization Plans

In the third quarter of 2012, we announced a plan to exit our Kingsburg, California metal container manufacturing facility.  Our plan included the termination of approximately 50 employees and other related plant exit costs.  The total estimated costs for the rationalization of this facility of $2.4 million consist of $1.5 million for employee severance and benefits, $0.2 million for plant exit costs and $0.7 million for the non-cash write-down in carrying value of assets.  Through September 30, 2012, we recognized a total of $1.7 million of costs, which consisted of $1.5 million of employee severance and benefits and $0.2 million for the non-cash write-down in carrying value of assets.  Remaining expenses of $0.7 million are expected primarily in 2012.  Remaining cash expenditures of $1.7 million are expected in 2012 and thereafter.

In the first quarter of 2012, we announced a plan to exit our Breinigsville (Allentown), Pennsylvania plastic container manufacturing facility.  Our plan included the termination of approximately 32 employees and other related plant exit costs.  The total estimated costs for the rationalization of this facility of $2.7 million consist of $0.2 million for employee severance and benefits, $1.6 million for plant exit costs and $0.9 million for the non-cash write-down in carrying value of assets.  Through September 30, 2012, we recognized a total of $2.1 million of costs, which consisted of $0.2 million of employee severance and benefits, $1.0 million for plant exit costs and $0.9 million for the non-cash write-down in carrying value of assets.  The plant has ceased operations.  Remaining expenses of $0.6 million are expected primarily in 2012.  Remaining cash expenditures of $0.6 million are expected in 2012 and thereafter.

In the first quarter of 2012, we announced plans to reduce costs in the U.S. corporate office and European manufacturing facilities of our closures business through the termination of approximately 49 employees, with total estimated costs of $3.0 million for employee severance and benefits.  Through September 30, 2012, we recognized a total of $1.9 million of costs and made cash payments of $0.8 million.  Remaining expenses of $1.1 million are expected primarily in 2012.  Remaining cash expenditures of $2.2 million are expected in 2012 and thereafter.